The Federal Open Market Committee (FOMC) raised the policy rate corridor by 75 basis points. In the view of economists at Commerzbank, it is getting harder and harder to add more strength, at least, from the Fed’s factor.

Past hawkish tones are hard to top

“Yesterday's news from the Fed justifies the current USD strength, but hardly provides any new arguments. I still consider this to be moderately USD-positive.” 

“Powell had to answer some questions about a hypothetical future pause in the interest rate cycle. Getting that done without supporting those who want to interpret his words dovishly was not easy.”

“Lesson learned: past hawkish tones are hard to top. It's getting less and less likely that the Fed can push the dollar massively stronger. Those who are betting on USD strength must hope for other factors. On Mr. Putin, for example. But you certainly don't want that either — at least if you're living in Europe.”